Real Estate License Contracts 2 — Questions and Answers
Question 1: Which element is NOT required for a real estate contract to be legally valid?
- Offer and acceptance
- Notarization by a public notary (Correct answer)
- Legal capacity of the parties
- Consideration
Correct answer: Notarization by a public notary
Notarization is not a required element for a valid contract; offer, acceptance, capacity, consideration, and legal purpose are.
Question 2: A contract signed by a minor for the purchase of real estate is generally considered:
- Void
- Voidable by the minor (Correct answer)
- Fully enforceable
- Voidable by the seller
Correct answer: Voidable by the minor
Contracts with minors are voidable at the option of the minor because they lack full legal capacity.
Question 3: Under the Statute of Frauds, a contract for the sale of real estate must be:
- Recorded with the county
- In writing and signed (Correct answer)
- Witnessed by two parties
- Reviewed by an attorney
Correct answer: In writing and signed
The Statute of Frauds requires real estate sales contracts to be in writing and signed to be enforceable.
Question 4: When a buyer makes a counteroffer, the original offer is:
- Still open for acceptance
- Automatically terminated (Correct answer)
- Converted to an option
- Binding on the seller
Correct answer: Automatically terminated
A counteroffer rejects and terminates the original offer, creating a new offer.
Question 5: Consideration in a real estate contract refers to:
- The closing date
- Something of value exchanged by the parties (Correct answer)
- The property's appraised value
- The agent's commission
Correct answer: Something of value exchanged by the parties
Consideration is the thing of value (money, promise, etc.) each party gives, making the contract binding.
Question 6: A contract that has been fully performed by all parties is described as:
- Executory
- Executed (Correct answer)
- Void
- Unilateral
Correct answer: Executed
An executed contract is one where all obligations have been completely performed.
Question 7: Which term describes a contract where one party promises performance in exchange for an act by the other?
- Bilateral contract
- Unilateral contract (Correct answer)
- Implied contract
- Voidable contract
Correct answer: Unilateral contract
A unilateral contract binds one party to perform only if the other completes a specific act.
Real Estate License Contracts 2
Which element is NOT required for a real estate contract to be legally valid?